How embarrassing — Sydney comes in at number seven on the list of the world’s cities with the most expensive housing, being beaten by six Californian towns and a theme park (Honolulu). We’ll just have to try harder.
The main deduction to be made from the survey is not some excuse for the local housing industry to push for more tax breaks, but proof that Californians are particularly stupid.
Top of the list is Los Angles, which is an earth-quake prone hole that’s overdue for a good racial riot. Ventura and San Diego are just outer-LA, the latter with a couple of killer whales and battle ships thrown in while the only thing going for the former is an old America song about its main road.
San Francisco also is a quake waiting to happen with a harbour that’s boring compared with Sydney’s, water that’s too cold for swimming and covered in fog half the year. And it’s full of beggars. And people jumping off the bridge.
Which leaves Stockton. Stockton? A little inland town of 290,000 in the middle of nowhere between San Fran and Sacramento, it’s city slogan is “Stockton’s Great, Take a Look!”. ‘Nuff said.
Meanwhile, back in God’s Own, the provincial boroughs are claiming they’re expensive too and everyone’s after some sort of handout. Developers want state governments to subsidise their costs and local governments to stop raping them, while the landlord class wants an end to land tax and tenants believe it’s outrageous that landlords might seek a rental return of maybe four per cent.
The unspoken political imperative though is that there is one thing worse than onerous housing affordability: falling house prices. If you want to really annoy a whinging wannabe first-home buyer, let him acquire a property and then see its value fall.
The only way housing affordability improves is by massive wage rises – which the Reserve Bank won’t allow – or by lowering housing prices which the vast majority of Australians, being owners, wouldn’t like at all.
Peter Costello displayed his shallowness by standing on the sidelines of the housing boom and cheering, reading the short-term truth of people enjoying feeling wealthier.
Of course it was in the early days of the bubble that a responsible treasurer might have been able to ease the pressure by undoing the capital gains tax folly he unleashed, but not Dollar Sweetie. The NSW government came up with a sensible policy but waited until the boom was turning into a bust, by which stage it was counter-productive.
The reality is that politicians who want to keep their jobs won’t do much to lower prices. The housing market eventually flattens and in time wages catch up with it, improving affordability.
If people can’t afford to pay the price of housing, they eventually don’t and move elsewhere. There are some social problems along the way that enlightened governments might ease with decent housing commissions, but they’ve largely gone out of fashion.
The government with the real problem is WA because they know their bubble is white-hot and will end very messily. One thing WA is not short of is land.
But it could be worse – you could be in California.